Yahoo.com-The New York Knicks are getting closer to reaching the Houston Rockets’ demands for Tracy McGrady(notes) and his $23 million expiring contract, league sources told Yahoo! Sports.

The Knicks and Rockets have designed the framework of a deal that would unload New York’s Jared Jeffries(notes), Jordan Hill(notes) and either Al Harrington(notes) or Larry Hughes(notes) for McGrady, Joey Dorsey(notes) and Brian Cook(notes).

As talks stood on Monday, the price of dumping the burdensome contract of Jeffries – who is owed $6.9 million next season – comes with the Knicks and Rockets exchanging 2011 first-round picks and the Knicks’ 2012 first-round choice going to Houston. New York also might include a 2010 second-round pick.

The Utah Jazz own the Knicks’ first-round pick in 2010.

The discussion on potential draft picks changing hands remains fluid.

The completion of the deal isn’t imminent, but sources involved in the discussions are increasingly confident that after months of back and forth, which intensified over All-Star weekend, an agreement is within reach. TNT’s David Aldridge first reported that talks between the teams had picked up.

One of the hang-ups in the deal, sources said, could be the Knicks’ inclusion of either Harrington or Hughes. There are slight variations of the trade that would change depending on which of the two veteran Knicks’ expiring contracts are included. With Harrington over Hughes in the deal, the Rockets wouldn’t need to include Cook.